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BIR RR 16-2011

BIR RR 16-2011

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REPUBLIC OF THE PHILIPPINESDEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUE
 
October 27, 2011
REVENUE REGULATIONS NO. 16-2011
SUBJECT: Increasing the Amount of Threshold Amounts for Sale of Residential Lot, Saleof House and Lot, Lease of Residential Unit and Sale or Lease of Goods orProperties or Performance of Services covered by Section 109 (P), (Q) and (V)of the Tax Code of 1997, as amended, thereby Amending Certain Provisionsof Revenue Regulations No. 16 -2005, as amended Otherwise Known asConsolidated VAT Regulations of 2005.TO : All Internal Revenue Officers, Employees and Others Concerned--------------------------------------------------------------------------------------------------------------------------
Section 1.
 
BACKGROUND
. Sections 109(P), (Q) and (V) of the Tax Code of 1997, asamended provides that the amounts stated therein shall be adjusted to their present valuesusing the Consumer Price Index as published by the National Statistics Office (NSO).Using the following formula / information:Value (Current Year)
=
CPI (Current year)Value Base Year CPI (Base Year)Value 2010
=
CPI 2010Value 2005 CPI 2005Where: CPI = Consumer Price IndexCPI 2010 = 166.1CPI 2005 = 129.8the adjusted threshold amounts, rounded off to the nearest hundred are as follows:
Section Amount in Pesos(2005)Adjusted thresholdamounts
Section 109 (P) 1,500,000 1,919,500.00Section 109 (P) 2,500,000 3,199,200.00Section 109 (Q) 10,000 12,800.00Section 109 (V) 1,500,000 1,919,500.00
 
 
Section 2. SALE OF REAL PROPERTIES.
- Pertinent portions of Section 4.106-3 of Revenue Regulations No. 16-2005, as amended is hereby further amended to read asfollows:"Section 4.106-3 Sale of Real Properties.
Sale of real properties heldprimarily for sale to customers or held for lease in the ordinary course of trade or business of the seller shall be subject to VAT.Sale of residential lot with gross selling price exceeding
P1,919,500.00
,residential house and lot or other residential dwellings with gross sellingprice exceeding
P3,199,200.00
, where the instrument of sale (whether theinstrument is nominated as a deed of absolute sale, deed of conditional saleor otherwise) is executed on or after Nov. 1, 2005, shall be subject to tenpercent (10%) output VAT, and starting Feb. 1, 2006, to twelve percent (12%)output VAT .x x x x x x x x x "
Section 3.
 
VAT EXEMPT TRANSACTIONS
. - Sections 4.109.-1 (B)(1) (e)(1), (p)(4), (q)and (v) of Revenue Regulations No. 16-2005, as amended, is hereby further amended toread as follows:"(e) Services subject to percentage tax under Title V of the Tax Code, asenumerated below:(1) Sale or lease of goods or properties or the performance of services of non-VAT-registered persons, other than the transactionsmentioned in paragraphs (A) to (U) of Sec. 109(1) of the Tax Code, thegross annual sales and/or receipts of which does not exceed theamount of 
One Million Nine Hundred Nineteen Thousand FiveHundred Pesos (P1,919,500.00)
; Provided,
That every three (3) yearsthereafter, the amount herein stated shall be adjusted to its presentvalue using the Consumer Price Index, as published by the NationalStatistics Office (NSO) (Sec. 116 of the Tax Code)
;
Provided, further,that such adjustment shall be published through revenueregulations to be issued not later than March 31 of each year;
x x x x x x x x x(p) The following sales of real properties are exempt from VAT, namely:(4) Sale of residential lot valued at
One Million Nine HundredNineteen Thousand Five Hundred Pesos (P1,919,500.00)
and below,or house & lot and other residential dwellings valued at
Three MillionOne Hundred Ninety-Nine Thousand Two Hundred Pesos(P3,199,200.00)
and below where the instrument of sale/transfer/disposition was executed on or after July 1, 2005;
Provided, That every three (3) years thereafter, the amounts stated
 
herein shall be adjusted to its present value using the ConsumerPrice Index, as published by the National Statistics Office (NSO)
;Provided, further, that such adjustment shall be published throughrevenue regulations to be issued not later than March 31 of eachyear;If two or more adjacent residential lots are sold or disposed in favorof one buyer, for the purpose of utilizing the lots as one residentiallot, the sale shall be exempt from VAT only if the aggregate value of the lots do not exceed
P1,919,500.00
. Adjacent residential lots,although covered by separate titles and/or separate tax declarations,when sold or disposed to one and the same buyer, whether coveredby one or separate Deed of Conveyance, shall be presumed as a saleof one residential lot.(q) Lease of residential units with a monthly rental per unit not exceeding
Twelve Thousand Eight Hundred Pesos (P12,800.00)
, regardless of theamount of aggregate rentals received by the lessor during the year;
Provided, every three (3) years thereafter, the amount shall be adjusted toits present value using the Consumer Price Index, as published by the NSO;Provided, further, that such adjustment shall be published through revenueregulations to be issued not later than March 31 of each year;
The foregoing notwithstanding, lease of residential units where the monthlyrental per unit exceeds
Twelve Thousand Eight Hundred Pesos (P12,800.00)
but the aggregate of such rentals of the lessor during the year do not exceed
One Million Nine Hundred Nineteen Thousand Five Hundred Pesos(P1,919,500.00)
shall likewise be exempt from VAT, however, the same shallbe subjected to three percent (3%) percentage tax.In cases where a lessor has several residential units for lease, some areleased out for a monthly rental per unit of not exceeding
P12,800.00
whileothers are leased out for more than
P12,800.00
per unit, his tax liability willbe as follows:1. The gross receipts from rentals not exceeding
P12,800.00
permonth per unit shall be exempt from VAT regardless of the aggregateannual gross receipts.2. The gross receipts from rentals exceeding
P12,800.00
permonth per unit shall be subject to VAT if the aggregate annual grossreceipts from said units only (not including the gross receipts fromunits leased for not more than
P12,800.00
) exceeds
P1,919,500.00
.Otherwise, the gross receipts will be subject to the 3% tax imposedunder Section 116 of the Tax Code.

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